THE UK Treasury is drawing up plans to cut the funding for GB Energy in June’s spending review, according to reports.
The Labour Government established GB Energy as a publicly owned company with a mission to invest in the generation and supply of clean energy to accelerate the decarbonisation of the electricity grid.
During the election, Labour pledged they would cut household energy bills by £300 through the new company, but instead, customers have seen bills rise by £170 since last July, and are set to increase even further from April 1.
The company had been promised £8.3bn in taxpayer money over the five-year parliament, but was only given an initial £100mn in October’s Budget to cover the first two years.
GB energy boss Juergen Maier in his first major broadcast interview, said the Labour’s General Election pledge of 1000 jobs for Aberdeen could take 20 years.
When pressed on this during an interview on Friday, Scotland Secretary Ian Murray could not provide a straight answer as to when we can expect to see new jobs: “Well, Gary, you know as well as I do that what he was referring to is actual jobs who get a GB energy pay packet.
"It's not about how many people work in the GB Energy HQ. It's about how many jobs it creates in terms of the renewables industry.”
Ahead of the spending review, ministers are now considering whether they can afford to give GB Energy the full promised £8.3bn amid a pivot towards greater defence spending, reports the Financial Times.
One option supposedly being considered by the Treasury is cutting the funds previously earmarked for GB Energy to fund low-interest loans via local authorities for projects such as solar panels on roofs and shared-ownership wind projects.
Neither the Treasury nor the Department for Energy Security and Net Zero said that GB Energy was still guaranteed the £8.3bn, which was a pledge in last year’s General Election manifesto.
Ministers are carrying out a “zero-based review” of all government spending and whether it is still a priority. One government official said the stock response “‘HMT refuses to confirm X” could now be “applied to every single spending commitment” because of the ongoing spending review.
The uncertainty over funding comes as many in industry remain unclear about exactly what role GB Energy will play in the rollout of low-carbon electricity schemes in the UK.
Ian Murray on Friday morning told the BBC: “Energy's remit is to get to this clean power emission by Labour delivered for Scotland, lowering bills.”
He added: “I don't think anybody would have thought that we would lower bills on the day after the election.”
Miliband (above) has already been over-ruled on the Government’s backing for the expansion of Heathrow airport’s third runway, which was announced by Reeves as part of a major push for economic growth in January.
Meanwhile Scotland received nothing in those infrastructure plans.
The Government said: “We are fully committed to GB Energy, which is at the heart of our mission to make Britain a clean energy superpower and to ensure homes are cheaper and cleaner to run.”
